Google bets on AI to rival Microsoft, Amazon’s cloud dominance in India

This rising demand underpins Google's decision to make its biggest bet in the country last month, when it announced a $15 billion investment to set up a 1 gigawatt (GW) data centre in Andhra Pradesh.

“We’re seeing a very strong demand increase for Google Cloud, and that is seen through public data. We’re seeing our overall growth rates increase over the last three quarters," said Matt Renner, president of global revenue at Google Cloud. "We’re getting larger as a company, but we’re growing faster. That’s not necessarily happening at the same pace as our competitors. This is because of AI, which has changed the conversations clients were having around hyperscalers—which were around what skills they had around Amazon and Microsoft."

“Simply put, Google can do what its competitors can do, but they can’t do everything that we can," Renner added.

India is still a minuscule fraction of the global cloud computing and data centre services market. Data from consultancy firm Gartner published on 15 July said that data centre spending from Indian businesses is projected to reach $4.8 billion by end-2025—a tiny 1% of the global $475 billion in data centre spending. In overall cloud services, India is expected to spend $160 billion this year—3% of $5.4 trillion spent globally.

Renner, however, vouched for India’s strategic importance for Google. “The $15 billion investment is evidence of our continued material investments in India. This is because of the demand we’re already seeing, and what we expect from India. There’s a lot of focus from Indian enterprises, as well as consumers when it comes to AI. We’re seeing very broad, diverse demand, focused on India—and we’re trying to meet that with infrastructure," he said.

Eyeing the India pie

In India, Google remains considerably behind Amazon and Microsoft’s cloud offerings. As per the latest available data, Google earned ₹1,963 crore from cloud services in India in FY24, compared with Amazon Web Services (AWS) earning ₹14,446 crore during that fiscal. Microsoft, which does not separately cull out its Azure revenue from India, reported ₹16,531 crore in income from services as of March 2024.

Since then, Google has made a concerted AI push to catch up with rivals such as OpenAI in AI applications and platforms. Google and Microsoft have not yet filed their respective FY25 earnings with India's corporate affairs ministry. AWS had reported a 16% rise in cloud revenue from India, to ₹16,789 crore for the fiscal year ended March 2025.

Over the past two years, India has emerged as a strategically-important market for the sector. A stable geopolitical environment, coupled with the government push to position the country as a global hub for cloud and data services, have pushed companies to invest locally. In this calendar year alone, the three Big Tech companies mentioned above have announced investments worth nearly $25 billion.

There's now a race building up among Amazon, Google and Microsoft to capture a larger share of India’s nascent cloud pie.

“The primary conversation is who’s the best partner for AI for the long term, and we’re uniquely positioned there. This also leads to an opportunity for us to replace our competitors down the road when it comes to standard hyperscaler services—which are now secondary and AI is the primary offering. We’re seeing healthy growth in our core business, but explosive growth in our AI business—and they’re both related," Renner said.

“Cloud has reached critical mass, but now the conversation among Indian enterprises is all around AI and the potential that it presents," said Sashikumar Sreedharan, managing director for India at Google Cloud. He cited examples of Reliance Jio and Tata Consultancy Services as enterprise customers using Google as their primary AI cloud provider.

Catch-up not easy

The going will not be that easy for Google, said industry experts.

The deals signed by cloud platforms are typically long-term, since it is expensive for businesses to move their data, applications and other services from one cloud platform to another.

A senior executive at one of Google’s top two rivals cited above, requesting anonymity, said since Google's AI applications and platforms are available on other cloud service providers as well, they do not expect long-term clients to suddenly jump to a rival platform, since migrating between different cloud services is complex, and involves various contractual terms and conditions.

Some other stakeholders of the industry also said that translating Google’s AI push into enterprise cloud deals would be difficult.

“Procurement patterns still favour incumbents. Azure is too embedded across enterprise IT stacks to be easily displaced, especially when AI is integrated into day-to-day workflows via Office 365 and Dynamics," said Sanchit Vir Gogia, chief executive at tech advisory firm Greyhound Research. “AWS, meanwhile, continues to hold ground with technically mature teams and compliance-driven industries that value reliability over reinvention."

Elaborating on her company's appeal, Himani Agrawal, chief operating officer, Microsoft India and South Asia said, “From banking and healthcare to media to government and manufacturing, organizations are choosing Microsoft for secure, scalable, and responsible AI innovation on Azure. 90 of the top 100 NSE companies are now on Azure, underscoring our leadership in powering the nation’s digital core."

An email sent to Amazon Web Services did not receive a response until press time.

Summing up Google's progress, Gogia of Greyhound said, “Google, for now, is winning add-on workloads, not entire cloud estates. It’s being brought in as a specialist, an AI sidecar, rather than the primary driver. That may change over time, but for now, Google’s growth reflects experimentation, not defection. Gemini and the broader Vertex ecosystem are excellent fits for greenfield AI projects, not legacy system overhauls."

Jayanth Kolla, partner at tech consultancy firm Convergence Catalyst adds to the argument. "Many companies move across cloud platforms in order to not be tied down to convoluted contractual terms from the Big Tech providers. But, Google has typically not fared well when it comes to offering a differentiated cloud platform as compared with its rivals. Whether it can do so this time around, with AI, is what could define if it can poach cloud deals from its rivals."

For perspective, data from the latest quarterly financials of the three companies showed that Google’s global cloud business grew 12% sequentially to $15.2 billion during the September quarter. AWS remained the global leader in cloud services, with revenue growing 7% sequentially to $33 billion, while Microsoft was a close second, growing 3% sequentially to $30.9 billion.